Identify Theft Insurance – A Lot of Hot Air

Identity theft is a HUGE problem that can ruin your life, steal your time, take your money and other terrible things. Capitalizing on this, are several companies that offer ID theft insurance and protection services – but do they work well?
The Washington Post did some digging and writesPam Dixon, executive director of the World Privacy Forum, agreed that consumers should buy a monitoring service if they can afford one — or take advantage of identity-fraud riders that some insurance companies offer as an inexpensive add-on to homeowner policies. But Dixon considers most ID insurance products unnecessary because financial losses are usually covered by the credit card company or bank after the incident takes place.
Ironically, many of the companies selling fraud protection are the same ones whose loose data-handling policies helped fuel identity theft in the first place, several analysts said. And most contended that Congress should require that credit bureaus notify consumers for free of any bogus information that appears in their records.
“It is an abomination that people have to pay for credit-monitoring services and ID-theft products,” said Beth Givens, director of the nonprofit group Privacy Rights Clearinghouse. “It should be stuff they get for free.”